Thursday, October 29, 2009

It's official, Google has gone live with their Comparison Ads product.

Google now competes with other lead providers for lead buyers' share of wallet in mortgage. Some people have speculated that they are biting the hand that feeds them by competing with the likes of LendingTree (one of their big adwords buyers); others that this legitimizes the lead sector and grows the pie for everyone. One thing is for sure, with the traffic that Google gets and the high intent levels that Google visitors who enter search queries around the term "mortgage" have, the lead industry probably just changed forever!

So what does the Comparison Ads products do? Looking at the details of the post it looks like when a Google user enters a query about mortgages, the first thing that happens is that the top sponsored link that appears is one form Google asking whether or not you want to compare mortgage quotes. Notably when I enter a query it does not give me this option so I assume Google are only offering the option to a percentage of the users who are searching for a mortgage.

If one then clicks on the "Compare rates" button on Google's interface one is moved to a screen with a set of options on the left hand side to identify your situation so that a quote can be generated. If the image on Google's blog is accurate then it looks like there is no submit buttons so that suggests that the quote becomes more accurate in real-time as you enter more information. No one else currently does that that I know so this is quite a nice feature. The other thing that is notable is that for each quote provided the consumer is given the option to "Request quote" or call a number for the provider. This is exactly the functionality I referred to just yesterday in my post on Consumer Initiated Contact leads and lends much more credence to my belief that this is the model of the future for lead providers. I assume that the "Request quote" sends the data that you have entered to the lender, although it does not appear to have any identifying information, which make the data rather useless... In summary it's pretty hard to figure out exactly how the Comparison Ads really works because the screen shots appear to be "illustrative". No doubt full details will be provided pretty soon.

As both Leadcritic and Techcrunch point out, whatever the functionality, this is a body-blow to some lead providers. You can argue that Google is wielding monopolistic power or you can see it as Google providing what the consumer really wants. I do think that it will be hard for certain lead providers to compete with Google. If a lead provider relies upon search for the majority of their leads and is unable to quickly switch to other forms of traffic generation, then this will be a problem for them -I'm sure Bing will follow suit pretty quick as what is being offered is quite similar to farecast in travel and perhaps even dazed and confused Yahoo! will enter this market too. I think search is soon to be a non-viable option for lead providers.

That said, this seems like quite a different product from LendingTree's in that with LendingTree you complete a massive form in order to get what is (or should be) a pretty firm quote. Google's form seems very short and thus the accuracy of the quote generated may be far from perfect. It is also unlikely to have quite the same impact on lead providers who generate their leads in the plethora of ways that don't involve search.

My personal view is that if Google's foray into the lead industry is successful then consumers and lead buyers will be the big winners. I think it will force the lead industry to try harder, innovate more and become more transparent in order to compete. While uncomfortable for many current lead providers, I don't think that this is a "bad" thing for the industry.